MACD (S&P 500; 19,39,9) is slightly above the zero line and pointing down = Neutral

MACD (S&P 500; 19,39,9) is below its signal line = Bearish

S&P 500 support is 2,122 (100-day MA), 2,050, and 2,000.

Sentiment indicators

II survey: (Sept. 13) 49% Bulls; 22.6% Bears = Bearish

AAII survey: (Sept. 14): 27.9% Bulls; 35.9% Bears = Neutral

VIX: @ 15.37 = Neutral

RSI: (S&P 500) @ 42.91 = Neutral

Comment: Market is down but not out. The Fed and BOJ have market-moving meetings and statements this week. It’s a good idea to sit on the sidelines and watch to see if market continues to retreat, or if the central bank can keep markets calm. The odds are good volatility will continue during the week. Nevertheless, market typically moves higher right before and during Fed meeting.

Comment: What a difference a day makes! It’s too early to proclaim a trend change as this could be only a one-day pullback. I used some cash to probe the market with SPY put options. I’m looking for clues, i.e. if volatility continues to spike, if there is an intraday reversal, and if market continues to sell off at end of day. Prepare to go long if selloff is extreme.

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